OTT credential-sharing to cost $500MN in revenue in 2015

DetailsMichelle Clancy | 09 July 2015

It's common for families to share log-in details for services like HBO Go, but that's bad news for programmers: over-the-top (OTT) video service credential sharing will cost the industry $500 million in direct revenues worldwide in 2015.

In a recent survey Parks Associates found that 6% of US broadband households use an OTT video service that is paid by a person living outside of the household. That number increases among millennials: 20% of OTT users aged 18-24 use an OTT video service paid by someone outside the home, the highest of any age group. Only 10% of OTT subscribers 25-34 admit to this behaviour. Across the board, few respondents expressed guilt or embarrassment over using someone else's video service credentials.

Glenn Hower, research analyst at Parks Associates, commented: "Credential-sharing has a measurable impact on video services, particularly in the OTT video service area, where young subscribers are active. The impact on OTT video revenues is especially troublesome as OTT providers are investing large sums of money to boost their original content offerings."

While credential-sharing predominantly impacts OTT service revenues, the process will affect pay-TV operators as they develop and deploy their own OTT and TV everywhere offerings, Hower said.

"The motivation for credential-sharing is primarily economic, and a move to consolidate video service subscriptions among family and friends stands to impact digital video services of all types in the near future," he added.

Live-streaming applications like Meerkat and Periscope, which are used to "share" broadcast events such as Game of Thrones episodes and the Mayweather-Pacquiao fight, will also have an impact.

"Live-streaming usage has garnered media attention recently, but credential-sharing is also a popular form of piracy in the connected world, one that has received varying responses from service providers and content owners," Hower concluded.